As part of a wider review of UK partnership taxation law, the UK Government published a consultation document on 20 May of this year, as noted in our earlier memorandum on the same topic (see our memorandum on “Proposed Changes to UK Tax Treatment of Partnerships and LLPs” of 24 May 2013). Following this consultation, as part of its Autumn Statement on 5 December 2013, the UK Government published new legislation to address the way in which some mixed member partnerships were being operated so as to allocate profits and losses according to partners' individual tax circumstances, generally through arbitrage of different tax rates (the top rate of income tax for an individual is currently 45%, while the rate of corporation tax is currently 23%). The types of partnerships likely to be affected are large professional partnerships or those in the alternative investment fund manager sector, typically hedge funds.

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